Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

The Bitch Is Back!

Posted by hkarner - 10. Februar 2017

Thursday, February 9, 2017, Observing GreeceKastner

Suddenly, the Greek crisis is back. Or so all the media have reported in recent days. In actual fact, the Greek crisis is neither back nor has it ever been gone – it’s just there!

The question is only whether the crisis is dormant or coming back to life. It is dormant when there are no ‚decision points‘ (no major payments due, no major deadlines to be kept, etc.). When a new tranche has just been disbursed with a new review date set in 6 months, one can rest assured that there will be no Greek crisis until 6 months later. When there are decision points all the time, there will be a Greek crisis all the time. We are now, once again, approaching decision points. And the bitch is back.

As always, the Greek Analyst nails it above. I think even if all of Greece’s debt were forgiven, the problems would continue. They wouldn’t be felt for a number of years because, starting from zero, Greece could again start borrowing heavily. But that wouldn’t change the process: as soon as a decision point comes up, the crisis returns.

Marcus Walker of the WSJ put together a coherent thread about the timeline of the Greek crisis where he traces Greece’s problems to the fiscal mismanagement from 2002-09. Not quite! I believe that today’s Greek crisis has its origins back in the early 1980s when two tectonic movements reinforced each other: the spendthrift policies of the PASOK/Papandreou (father) government and the financial benefits of having joined the EU. This is not to blame PASOK alone. On the contrary, PASOK started it and when ND came to power, they tried to be a cheap copy of PASOK.
Until there is a general acceptance of this development on the part of the Greek government and the Greek people, Greece will be in crisis for the simple reason that one only changes behavior if one realizes that one has done wrong.

As long as those who uncover and correct scandals are sued by the Greek government while those who caused the scandals walk free, the Greek crisis will not be ‚owned‘ by Greeks.

Footnote: Interestingly, in most of the private conversations I have with Greek friends there is agreement on the above.

 

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